Letter to Shareholders

Team Gray is pleased to report you that our company is one of the country’s leading network
providers around the world. The year witnessed considerable strengthening of our spectrum
footprint both through buying at the latest round of auction and inorganic acquisitions. Team
Gray on its part has navigated extraordinary challenges with a well thought out strategies and of
course, sheer resilience. Amidst this massive market turbulence, we managed to increase our
plants around the globe. Many small network operators lost their bearings under the intense
onslaught and consequently have exited from the market. The shake-up has triggered an
industry wide consolidation process, which could prove beneficial for the market in the long run.

At the onset, I would like to thank all of you for the faith that you have shown in this company
and its management. It is the support of the shareholders that gives the management,
employees and all the stakeholders of the company to work towards the betterment of all the
parties associated with the company.

However, despite our best efforts, this fiscal year was not a very good one for the company. The
sales were down, our investments in new technologies did not pay off the way we expected but
could not generate a good return for our shareholders. Our aggressive network transformation
program continued under Project Gray during the year as well.

The reasons for the above are as follows:

 High pricing – We priced our products very high initially, but the market responded
more to less quality than price and that is why we could not sell according to our
forecasts. Another reason for the low sales was the fluctuating demand.
 Low sales- Due to fierce competition in the market and our wrong pricing strategy we
had to face low sales, which also decreased our market share. This also led to high
inventory levels
 Higher Production Costs – Our Research and Development expenditure was less this
year which put us at a disadvantage and we had higher production costs as compared
to our competitors.
 Lower demand for a certain technology – We invested in a technology which
subsequently had a low demand in the market and hence could not get a good return on
investment from this investment.
 High Transportation Cost and Taxes – A major reason for the higher prices was also the
high transportation prices and high taxes that we had to pay when we exported our
good from the US to Asia and Europe. This issue was more in case of exports to Asia.

Solutions we have come up with since last two rounds:

We reduced our price and are now currently selling at low margins. This would also help us to
reduce our inventory. We are also planning to reduce the number of plants in Asia as well
as USA.
In short, the past year had a lot to offer. We have learned from our mistakes. Even though our
efforts did not show in the financial statements of the company, but I would like to assure all of
you that we are in a stable position and we will be able to do well in the coming year and our
shareholders will also benefit from our success.

We are also keeping a close eye on our overall objective to become the market leader within a
span of next five years. This will be possible if we continue to improve. We want to achieve
sustainable growth and create value for our customers, for our employees and for our
shareholders.

We once again thank you for your trust and invite you to stay with us as we move forward in this
journey.

Telecom industry lies at the heart of today’s increasingly digital society and economy. As new
generation of technologies and innovations take place and industry structure gets reshaped
under competitive pressure, we will come across new operational challenges, and more
importantly opportunities. With our robust spectrum portfolio, competitive position and
management bandwidth, we are well assured to take advantage of this rapidly changing
environment to strengthen our leadership position even further.